Indonesian online peer-to-peer lending firm Investree is said to be in talks to raise funding for its Series D round and has roped in HSBC to facilitate the transaction, according to two sources familiar with the matter.
The Jakarta-headquartered firm is looking to raise up to $100 million as it carves out significant expansion plans to strengthen its position in the market, the people mentioned above added.
Investree expects to close the funding by the end of this year.
When contacted, Adrian Gunadi, CEO at Investree, confirmed the fundraising plans but declined to specify the target amount.
Highlighting the company’s expansion plans, Gunadi said Investree is betting big on its existing markets namely Thailand and the Philippines, besides its home turf Indonesia, as it looks to go beyond the ambit of connecting SMEs to lenders to help the former secure loans.
“Our strategy is to be an embedded finance solution provider in the SME segment … we realised SME needs are beyond financing and they could be in areas of accounting and HR. Hence, we figured out some potential solutions such as alternative credit scoring and digital invoicing that we plan to offer,” Gunadi said.
Currently, supply chain financing is the main revenue generator for Investree. It dominates the firm’s total volume of loan disbursement, about Rp 11 trillion ($772.37 million) or 95% of the total amount since its inception in 2015.
The remaining comes from partnerships with third-party players, which includes a loan facility for women entrepreneurs through Gayatri microfinance programme that has a tie-up with microfinance firm Gramindo. Investree has also partnered with eFishery for providing loan facilities for aquaculture farmers, worth Rp 30 billion ($2.1 million).
Moreover, Investree has provided buyer financing to digital freight forwarder Andalin’s customers in June 2021, wherein it offered them access to customs and tax financing.
Eyeing markets beyond its home turf
Investree secured separate licences to operate in Thailand and the Philippines at the beginning of this year.
“We target our business in Thailand and the Philippines will contribute around 10% to the company’s total revenue in 2022. Currently, it remains a small portion as the company has gained the official licence in those two markets early this year,” Gunadi said.
Investree plans to replicate its Indonesian business model in both countries where it sees ample growth opportunities since there are not too many players operating in the segment.
In Thailand, Investree has forged partnerships with e-procurement and B2B marketplace platform Pantavanij Partners, payment gateway 2C2P, and FlowAccount, an online invoicing and accounting software.
Meanwhile, Investree Philippines is a joint venture company with Gotianun family-led Filinvest Development Corp. In July, the fintech firm partnered with digital lender Netbank to address the over $200 billion MSME credit gap in the market.
SME loans as a percentage of GDP is approximately 3% in the Philippines, while it stands at 37% in Thailand.
Last year, Investree raised $24 million in its Series C round, which was led by BRI Ventures and MUFG Innovation Partners. Others who participated in the round then were China’s 9F Fintech Holdings Group and Japan’s SBI Holdings. Subsequently, the company also bagged $15 million as venture debt from Accial Capital.
Investree became one of the investors in BRI’s tech venture debut fund Sembrani Nusantara. Moreover, BRI Ventures set aside a corpus of Rp 60 billion ($4.25 million) to provide venture debt for tech startups through the company.